Monday, July 27, 2009

The Devil is in the Details

Some recent postings on Orthonomics have centered around the idea of establishing a budget, with an example given of one such budget suitable for those who are frum. Part of the commentary is centered around the idea of the details of the budget. Some people believe the budget is not detailed enough; others believe it is too detailed. I guess that where people will fall in the discussion is going to depend on whether they believe that "the devil is in the details."

Let's take a budget category that is going to apply to everyone: food. For some people this is enough of an indicator for what types of expenses are covered or should be covered in this category. I'm one of those detail people; "food" as a category would tell me absolutely nothing, particularly if I were trying to cut down expenses.

What gets covered in food? Anything edible, or that could be edible after preparation. Thus ready made frozen pizza goes under food, and so does flour and salt. Snack foods go under "food," as do bread and potatoes. For many people the ready made food they purchase from take out food stores or from a restaurant or pizza shop is also "food": cole slaw, potato salad etc. purchased from outside is eaten so it's "food."

There are some who consider that paper and plastic products used in food preparation and consumption also go under the category of "food." The reasoning is that they are only used with food so they belong in the food category.

Still others broaden the category: they talk about supermarket/grocery/food store purchases as one category. That being the case, items like cleansers of all types are included under this category. So are clothes washing products. So are air fresheners. So is that bottle of aspirin you bring home. So is your shampoo and tooth paste.

Those who argue against too much detail in a budget outline say that people with spending problems or those who have never created a budget before will be overwhelmed if there are too many categories or too many sub-categories. Those, like myself, who are arguing for more detailed budgets and more categories/sub-categories do so because many budget breakers are found precisely in these little sub-categories that hide in the corners of the broader categories and leach money out of the budget.

Someone whose food bills were heading way out of sight had to find a way to cut back. In the general category of food, meat and chicken seem to be obviously costly items. But cutting out these items did not make for a happy family. Sorry, but not everyone is cut out to be a vegetarian. But without a detailed listing of what else falls under "food" this family could not manage to make a real dent in their budget woes.

Here is what a detailed budget listing for food would have brought to light. Cole slaw from a take home food store, one pound per week, at $5-6 per pound, or $260-340 per year. Or one pound of potato kugel per week, at $6 per pound. Or assorted cold cuts once a week, averaging out at $10 per pound and higher. Or frozen pizza bagels at $5-6 per box, per week. Frozen blintzes at an average price of $6 per package.

Lumping items under grocery store purchases would have hidden these costs. Paper juice cups at $2.99 for 80 cups. Or name brand foil paper at $4 for 37.5 feet. Or detergent purchased not on sale for $6.49 per bottle. Or multiple toothbrushes purchased multiple times a year at $3 each. Or that "your hair will be the envy of the world" shampoo and conditioner, at $6 and up per small bottle.

Cutting down is made easier if you see all the details of what you are buying. Maybe, just maybe, you will identify a few smaller items that you really don't care all that much about that can be cut out and that could give you real savings. Maybe you could identify spending patterns that could be adjusted. Let me give you a personal example. I buy laundry detergent about twice a year, when it goes on a steep sale. No, I don't buy the store brand. I have a particular detergent I use that works the way I want it to work, so I wait until the sale and then buy in bulk. Yup, sometimes they limit the number of bottles per shopping trip per customer, so I go out to the car and then back into the store. Right now I have enough detergent to get me through until January or February. My savings for the year are about $70-80. Doesn't seem like all that much does it? But it is. Because that type of "detail" savings and shopping is repeated for a lot of the items that hide in the budget and eat away at it in small bites. I do the same for fabric softener. Now the savings are at $140-160 per year. We change toothbrushes 3-4 times per year. Just for arguments sake, a family of five doing so, at $3 and up per tooth brush, would be spending $60 a year just on toothbrushes. Now find a real bargain on good toothbrushes--6 in a package for 99 cents, and yes, sturdy, full bristles and NOT cheap--and your total for the year is $3.96 for almost 5 changes of brush, a savings of $56. Only three items and already a savings of $194-214 per year. Add in home made coleslaw, for a savings of $160 to $240 and up a year, and I've just cut down spending by $344-464 and more a year in a really "painless" fashion across only four items.

I know that there are people for whom this much detail is going to be frustrating; they aren't forest/trees people. But I also know a lot of people for whom general categories don't work either. Perhaps the best advice we can give is find a method that works for you, that you are willing to put a little time into, and then use it. Yes, you may have to experiment a bit to see what works for you.

Someone once told me that such a detailed way of looking at shopping was really nit picking. I laughed and answered: "So you would rather have lice?" It took a bit of explaining but she finally got it. If you don't pick nits, expect lice. If you don't look at the small details you may find your budget going seriously out of whack.


Anonymous said...

I try to shop the same way, but I do not find it "painless" at all. I find it incredibly time consuming. And often, I view the savings as an "offset" to the times when I need something, NOW, and I am out of it, or unable to make it from scratch, through no fault of my own.

leahle said...

I've tried it both ways and what works for me is a personal combination. Food type of stuff I do put down in detail but I don't get so detailed in the clothing area because I just don't buy all that much of it. At this point it's mostly for the kids and when they outgrow a size nothing to do but go to the next size. Can't save much there.

Lion of Zion said...


"Sorry, but not everyone is cut out to be a vegetarian."

some would say that not everyone is cut out to drive old cars, wear hand-me-downs, etc.


"What gets covered in food?"

"At this point it's mostly for the kids and when they outgrow a size nothing to do but go to the next size. Can't save much there."

we've been lucky and so far have a lot of hand me downs from friends and family

ProfK said...

Re "some would say that not everyone is cut out to drive old cars, wear hand-me-downs, etc." And? My point has been that everyone needs to find a way to personalize a budget. Some will draw the line at not giving up meat; some will draw the line at not driving old cars; some will draw the line at hand me down clothes. This last one I can understand.

Growing up there was a girl in my school who was the poster child for poverty. Her family had nothing. She owned NO clothing that was not from the Church boxes that were hand me downs (including underwear). She once said that she was going to make it and make it big in life and then she was never, ever going to wear something that had been worn by someone else first. I've never really been in her position but I could well imagine that it's easier for us to be discussing using hand me downs when we have an alternative then it was for her with no alternative.

Anonymous said...

I agree that the devil is in the details. I remember seeing a rerun of an episode of All in the Family where Archie had been laid off and Gloria was marveling at her mother's ability to manage the budget and keep the house running. Edith responded that if you watch the quarters, the dollars will take care of themselves. For some reason, that line always stuck with me. Of course adjusting for inflation we would say mind the dollars and the tens or hundreds will take care of themselves.
The biggest stumbling block I sometimes find is that when talking about some huge monthly expenses, whether it is mortgage or health insurance, its so easy to view saving a couple of dollars on groceries or take out as irrelevant.

Lion of Zion said...


i misread you. i thought you were suggesting that all people on a tight budget should cut out meat.

as far as hand-me-downs go (i have a post coming up), there are hand-me-downs and there are hand-me-downs. we've been pretty lucky. i would say a majority of my son's clothing are hand-me-downs from friends and cousins. it's mostly been great stuff. i also don't think my wife really bought much maternity clothing either, as she borrowed from friends.

Lion of Zion said...

and what became of this poor girl in the end? did she make it?

ProfK said...

I also used the pass around system with my cousins with my kids when they were little for some items. But when new was needed, particularly for shoes, I bought.

Your question about what happened to my long ago classmate got me curious. I checked the alumni listings and it showed her with a BA from Portland State University and an advanced pharmacy degree from UC Irvine. I hope that means that she made it.

conservative scifi said...

Excellent post. While I must admit that it is my wife who generally does the grocery shopping, I am the "orderer" since I do the cooking.

One simple way I've found to save another couple of hundred dollars a year is to make slightly more food for Friday night dinner. We then always have enough for the leftovers on Sunday night (or Saturday night this week to avoid eating meat except on Shabbat). I also routinely make four meatless dinners a week, ranging from broccolli wraps to veggie chili, which also saves money and is probably quite a bit healthier.

My wife would definitely agree with you on buying in bulk when on sale. (But of course, that is easier to do when you have sufficient cash resources so that you don't need all of your money each week).

Orthonomics said...

What serves one person's needs is unlikely to serve another. It can be very helpful for some to keep an extremely detailed record of expenses and for others it will sap their energy and discourage them.

My own recommendation would be to start with general categories, pick the ones that are the most flexible to attack and then go from there.

I spent a lot of time and energy figuring out how to keep our grocery and drug store bills low and then moved onto consumer purchases. Now that I've got that item slashed in half (and I was always frugal), I have moved onto trying to implement some more utility saving ideas. This year I got everyone dressing a bit warmer in the winter (we are a bit whimpy about both cold and heat) and the payoff came this last month when we got to skip an entire monthly gas bill installment. Now that the payoff has come, the motivation followed to turn up the temperature gauge for the air conditioning.

So far I haven't tried to mow my own lawn (too many allergiess), so I'm back to learning more about things I can do to continue to slash the grocery bills. Perhaps in a few years I will have more energy for the lawn, but in the meantime I am letting that item be absorbed under a general item. I know it is there, but I'm not ready to look at that part of the budget.

Lion of Zion said...

"I hope that means that she made it."

don't be so sure. i'm a pharm.d. who relies on hand-me-downs.

Lion of Zion said...

ok, i don't mean "rely" in the sense that i'm a "poster child for poverty" like her

Miami Al said...

I disagree 100%. The first budget should be broad, you have to know what's going on. I used to keep a meticulous budget, knew what was going on, got overwhelmed with a bunch going on and let Quicken fall... Lost track of things, expenses creeped up, and we went from saving $1k+month to $2k-$3k in the hole, and because things were floating on cards, etc., didn't even notice it quick enough.

Fixing that hole happened when I realized our expensive meat all the time budget exploded, going out to lunches all the time, etc. Child care expenses, vehicles needed replacing, etc., it was a few hundred a month that snuck up before we noticed.

A broad budget tells you where you are at, and you can focus on where you can have an impact. If your dining out budget creeped up to $1k/month, you know that you can whack it to $0 in a pinch. If you are focused on tooth brushes, you'll miss that one... and two working spouses dining out for lunch and dinner most nights can easily approach that.

Digging into the details is great, but if you start there, you'll miss the big picture. If you need to cut $1000, if your utilities are $2k, you can make a difference there, if they are $200, that's a waste of time to start with.